Title
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND UKRAINE
Preamble
PREAMBLE
Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Swiss Confederation (EFTA States),
and Ukraine,
hereinafter each individual State referred to as "a Party" or collectively referred to as "the Parties":
RECOGNISING the common wish to strengthen the links between the EFTA States on the one part and Ukraine on the other by establishing close and lasting relations;
RECALLING their intention to participate actively in the process of economic integration and expressing their preparedness to cooperate in seeking ways and means to strengthen this process;
REAFFIRMING their commitment to democracy, human rights and fundamental political and economic freedoms in accordance with their obligations under international law, including principles and objectives set out in the Charter of the United Nations and the Universal Declaration of Human Rights;
RECALLING their rights and obligations under multilateral environmental agreements to which they are a party, and the respect for the fundamental principles and rights at work, including the principles set out in the relevant International Labour Organisation (ILO) Conventions to which they are a party;
AIMING to create new employment opportunities, improve living standards and ensure high levels of protection of health and safety and of the environment in their respective territories;
REAFFIRMING their commitment to pursue the objective of sustainable development and recognising the importance of coherent and mutually supportive trade, environmental and labour policies in this respect;
DESIRING to create favourable conditions for the development and diversification of trade between them and for the promotion of commercial and economic cooperation in areas of common interest on the basis of equality, mutual benefit, non-discrimination and international law;
RECOGNISING the importance of trade facilitation in promoting efficient and transparent procedures to reduce costs and to ensure predictability for the trading communities of the Parties;
DETERMINED to promote and further strengthen the multilateral trading system, building on their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organisation (the WTO Agreement) and the other agreements negotiated thereunder, thereby contributing to the harmonious development and expansion of world trade;
DETERMINED to implement this Agreement with the objectives to preserve and protect the environment through sound environmental management and to ensure the optimal use of natural resources in accordance with the objective of sustainable development;
REAFFIRMING their commitments to promote inclusive economic growth by ensuring equal opportunities for all;
AFFIRMING their commitment to the rule of law, to prevent and combat corruption in international trade and investment and to promote the principles of transparency and good governance;
ACKNOWLEDGING the significance of good corporate governance and corporate social responsibility for sustainable economic development and affirming their support to efforts for the promotion of relevant international standards, such as the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, the OECD Principles of Corporate Governance and the UN Global Compact;
CONVINCED that this Agreement will enhance the competitiveness of their firms in global markets and create conditions encouraging economic, trade and investment relations between them;
HAVE DECIDED, in pursuit of the above, to conclude the following Free Trade Agreement (Agreement):
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Objectives
1. The Parties hereby establish a free trade area by means of this Agreement, based on trade relations between market economies and on the respect for democratic principles and human rights, with a view to spurring prosperity and sustainable development.
2. The objectives of this Agreement are:
(a) to achieve the liberalisation of trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994);
(b) to achieve the liberalisation of trade in services, in conformity with Article V of the General Agreement on Trade in Services (GATS);
(c) to substantially increase investment opportunities in the free trade area;
(d) to improve the framework conditions for trade enabled by digital means;
(e) to prevent, eliminate or reduce unnecessary technical barriers to trade and unnecessary sanitary and phytosanitary measures;
(f) to achieve further liberalisation on a mutual basis of the government procurement markets of the Parties;
(g) to promote competition in their economies, particularly as it relates to economic relations between the Parties;
(h) to ensure adequate and effective protection of intellectual property rights in accordance with international standards;
(i) to develop international trade in such a way as to contribute to the objective of sustainable development and to ensure that this objective is integrated and reflected in the Partiesâ trade relations; and
(j) to contribute, by the removal of barriers to trade and investment, to the harmonious development and expansion of world trade.
Article 1.2. Trade Relations Governed by this Agreement
1. This Agreement shall apply to trade relations between, on the one side, the individual EFTA States and, on the other side, Ukraine, but not to the trade relations between individual EFTA States, unless otherwise provided for in this Agreement.
2. As a result of the customs union established by the Treaty of 29 March 1923 between Switzerland and Liechtenstein, Switzerland shall represent Liechtenstein in matters covered thereby.
Article 1.3. Relation to other International Agreements
1. The Parties confirm their rights and obligations under the WTO Agreement and the other agreements negotiated under the WTO to which they are a party, and any other international agreement to which they are a party.
2. This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas, arrangements for frontier trade and other preferential agreements insofar as they do not have the effect of altering the trade arrangements provided for in this Agreement.
3. When a Party enters into a customs union or free trade agreement with a third party it shall, upon request by another Party, be prepared to enter into consultations with the requesting Party.
Article 1.4. Territorial Application
1. Without prejudice to the Protocol on Rules of Origin, this Agreement shall apply:
(a) to the land territory, internal waters, and the territorial sea of a Party, and the air-space above the territory of a Party, in accordance with international law; and
(b) beyond the territorial sea, with respect to measures taken by a Party in the exercise of its sovereign right or jurisdiction in accordance with international law.
2. The application of this Agreement is temporarily suspended in the territory of Ukraine over which the Government of Ukraine does not exercise the effective control until restoration of Ukrainian national laws and international law over such territory. Ukraine shall notify the other Parties of the application of this Agreement to such territory of Ukraine.
3. This Agreement shall not apply to the Norwegian territory of Svalbard, with the exception of trade in goods.
Article 1.5. Central, Regional and Local Government
Each Party shall ensure within its territory the observance of all obligations and commitments under this Agreement by its respective central, regional and local governments and authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities.
Article 1.6. Transparency
1. Each Party shall publish or otherwise make publicly available their domestic laws, regulations, judicial decisions, administrative rulings of general application and their respective international agreements that may affect the operation of this Agreement.
2. Each Party shall promptly respond to specific questions and provide, upon request, information to another Party on matters referred to in paragraph 1. The requested Party shall not be required to disclose confidential information.
Chapter 2. TRADE IN GOODS
Article 2.1. Scope
This Chapter shall apply to trade in goods between the Parties.
Article 2.2. Import Duties
1. Unless otherwise provided for in this Agreement, the Parties shall apply import duties on goods originating in another Party in accordance with Annexes I-IV (Schedules of Tariff Commitments on Goods).
If at any time a Party reduces its applicable most favoured nation (MFN) import duty, that import duty shall apply to goods originating in another Party if and as long as it is lower than the duty on imports calculated in accordance with Annexes I-IV (Schedules of Tariff Commitments on Goods).
2. Unless otherwise provided for in this Agreement, no Party shall introduce new import duties, or increase import duties on goods originating in another Party in accordance with its Schedule of Tariff Commitments on Goods.
3. For the purposes of this Agreement, "import duties" means any duties, taxes or charges imposed in connection with the importation of goods, except those imposed in conformity with:
(a) Article III of the GATT 1994;
(b) Articles 2.16 (Subsidies and Countervailing Measures), 2.17 (Anti- Dumping), 2.18 (Global Safeguard Measures) or 2.19 (Bilateral Safeguard Measures) or Article 5 of the WTO Agreement on Agriculture; or
(c) Article VIII of the GATT 1994.
Article 2.3. Export Duties
1. Upon entry into force of this Agreement, the Parties shall eliminate customs duties on exports. No new customs duties on exports shall be introduced on products exported from the customs territory of one Party into the customs territory of another Party.
2. Customs duties on exports to the EFTA States of products originating in Ukraine shall be gradually reduced in accordance with the commitments of Ukraine within the WTO.
3. If, after the entry into force of this Agreement, Ukraine lowers or eliminates its duties on exports to the European Union (EU), it shall accord to the EFTA States no less favourable treatment.
4. A customs duty on exports includes any duty or charge of any kind imposed in connection with the exportation of a product, including any form of surtax or surcharge in connection with such exportation, but does not include any charge imposed in conformity with Articles VII of the GATT 1994.
Article 2.4. WTO Agreement on Agriculture
The Parties confirm their rights and obligations under the WTO Agreement on Agriculture unless otherwise specified in this Agreement.
Article 2.5. Rules of Origin and Administrative Cooperation
The rules of origin and administrative cooperation are set out in Protocol (Rules of Origin).
Article 2.6. Classification of Goods and Transposition of Schedules
1. The classification of goods in trade in goods between the Parties shall be as set forth in the respective tariff nomenclature of each Party in accordance with the International Convention on the Harmonized System of Description and Coding System (Harmonized System or HS), as regularly amended in the framework of the World Customs Organization. In the Schedules of Tariff Commitments, the version of the HS and the year shall be indicated.
2. Each Party shall ensure that the transposition of its Schedule of Tariff Commitments is carried out without impairing existing tariff commitments agreed at the time of conclusion of this Agreement. Consequently, the customs duty applicable to the corresponding goods under a new tariff line shall be equal to or lower than the customs duty of the corresponding original tariff line and any other agreed tariff commitments, such as tariff dismantling periods, shall not deteriorate.
3. The Parties shall, on the request of a Party and within a reasonable period of time after receiving the request, discuss any concerns raised regarding the transposition of its Schedule of Tariff Commitments.
Article 2.7. Customs Valuation (1)
Article VII of the GATT 1994 and Part I of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.8. Technical Regulations
1. With respect to technical regulations, standards and conformity assessment procedures, the WTO Agreement on Technical Barriers to Trade (TBT Agreement) applies and is hereby incorporated and made part of this Agreement, mutatis mutandis.
2. The Parties shall strengthen their cooperation in the field of technical regulations, standards and conformity assessment procedures, with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets.
3. Upon request of a Party, which considers that a technical regulation, standard or conformity assessment procedure of another Party is likely to create, or has created, an obstacle to trade, consultations shall be held with the objective of finding a mutually acceptable solution. Consultations shall take place within 30 days from the receipt of the request and may be conducted by any method agreed by the consulting Parties. The Joint Committee shall be informed thereof.
4. Upon request of a Party, the Parties shall without undue delay agree on an arrangement extending to each other treatment related to technical regulations, standards and conformity assessment procedures which all Parties have agreed with the EU.
5. The Parties shall exchange names and addresses of contact points for this Article in order to facilitate communication and the exchange of information.
Article 2.9. Sanitary and Phytosanitary Measures
1. With respect to sanitary and phytosanitary measures, the WTO Agreement on the Application of Sanitary and Phytosanitary Measures applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties shall strengthen their cooperation in the field of sanitary and phytosanitary measures, with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets.
3. Upon request of a Party, which considers that a sanitary or phytosanitary measure of another Party is likely to create, or has created, an obstacle to trade, or that the other Party has not fulfilled its obligations under this Article, consultations shall be held with the objective of finding a mutually acceptable solution. The consultations shall take place within 30 days from the receipt of the request and may be conducted by any method agreed by the consulting Parties. In the case of perishable goods, consultations between the competent authorities shall be held without undue delay. The Joint Committee shall be informed thereof.
4. Upon request of a Party, the Parties shall without undue delay extend to each other treatment related to sanitary and phytosanitary measures each Party has granted to or agreed with the EU.
5. The Parties shall exchange names and addresses of contact points with sanitary and phytosanitary expertise in order to facilitate communication and the exchange of information.
Article 2.10. Import Licensing
1. The WTO Agreement on Import Licensing Procedures applies to this Chapter and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties may only adopt or maintain import licensing procedures as a condition for importation if other appropriate procedures to achieve an administrative purpose are not reasonably available.
3. The Parties shall not adopt or maintain import licensing procedures in order to implement a measure that is inconsistent with this Agreement, GATT 1994 or the WTO Agreement on Trade-Related Investment Measures. A Party adopting non-automatic licensing procedures shall clearly indicate the measure implemented through such licensing procedures.
4. The Parties shall ensure that all import licensing procedures are neutral in application, and administered in a fair, equitable, non-discriminatory, transparent, predictable and least trade-restrictive manner.
5. If a Party has denied an application for an import license, it shall:
(a) without undue delay, provide the applicant with a written explanation of the reason(s) for the denial;
(b) ensure that the applicant has the right to appeal the decision in at least one level of independent administrative and one level of judicial appeal; and
(c) if the decision is upheld in an appeal, provide the exporting Party with a written justification of the decision within 14 days.
6. Appeal procedures according to subparagraph 5(b) shall be easily accessible and implemented in an effective, prompt and non-discriminatory manner in accordance with the domestic laws and regulations of each Party.
7. No application for an import licence shall be refused for minor documentation errors that do not alter the basic data contained therein. Minor documentation errors may include formatting errors, such as the width of a margin or the font used, and spelling errors which are obviously made without fraudulent intent or gross negligence.
8. A Party adopting or amending regulations related to import licensing that are likely to affect trade between the Parties, shall promptly notify the other Parties, but no later than 60 days after publication. The notice shall clearly state the purpose of such licensing procedures and any conditions on eligibility for obtaining an import licence. A notification made by a Party in accordance with the WTO Agreement on Import Licensing Procedures shall be deemed equivalent to a notification under this Agreement.
Article 2.11. Export Licensing
1. Export licensing means any administrative procedures adopted or maintained by a Party requiring submission from the exporter of an application or other documentation to the relevant administrative body or bodies as a prior condition for exportation from the customs territory of the exporting Party, but does not include customs documentation required in the normal course of trade or any requirement that must be fulfilled prior to introduction of the good into commerce within the Party's territory.
2. The Parties may only adopt or maintain export licensing procedures if other less trade-restrictive measures are not reasonably available.
3. The Parties shall only adopt or maintain export licensing procedures in order to implement a measure that is consistent with this Agreement or the GATT 1994.
4. Each Party shall notify the other Parties ofits existing export licensing procedures, within 60 days of the entry into force of this Agreement.
5. Each Party shall publish any new export licensing procedure, or any modification to an existing export licensing procedure whenever practicable 21 days before the new procedure or modification takes effect, and in any case no later than the date such procedure or modification takes effect.
6. The notification referred to in paragraph 4 and the publication referred to in paragraph 5 shall contain the following information:
(a) list of products subject to licensing procedures;
(b) for each procedure, a description of the process for applying for a licence and any criteria an applicant must meet to be eligible to apply for a licence;
(c) contact point for information on eligibility; (d) administrative body(ies) for submission of applications;
(e) a description of any measure or measures being implemented through the export licensing procedure;
(f) the period during which each export licensing procedure will be in effect, unless the procedure remains in effect until withdrawn or revised in a new publication;
(g) date and name of publication where licensing procedures are published;
(h) the legal basis for the export licensing procedure;
(i) if the Party intends to use an export licensing procedure to administer an export quota, the overall quantity and, where practicable, value of the quota and the opening and closing dates of the quota; and
(j) any exceptions or derogations from an export licensing requirement, how to request those exceptions or derogations, and the criteria for granting them.
7. Any Party shall without undue delay respond to an enquiry by another Party regarding any export licensing procedures which it intends to adopt or which it has adopted or maintained.
8. When a Party has denied an export licence application with respect to export of a good to another Party, it shall provide the applicant, either automatically or upon request, with a written statement of the reasons for the denial. The applicant shall have a right of appeal or review in accordance with the domestic legislation or procedures of the exporting Party.
9. The provisions of this Article shall not apply to export licensing procedures relating to an export control regime and sanctions regime, or for implementing Partyâs obligations or commitments under United Nations Security Council Resolutions and the Arms Trade Treaty, as well as multilateral non-proliferation and disarmament regimes and export control arrangements including the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, the Australia Group, the Nuclear Suppliers Group, and the Missile Technology Control Regime.
Article 2.12. Quantitative Restrictions
1. Article XI of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. A Party introducing a measure in accordance with paragraph 2 of Article XI of the GATT 1994 shall promptly notify the other Parties A notification by a Party in accordance with Article XI ofthe GATT 1994 shall be deemed equivalent to a notification under this Agreement.
3. Any measure applied in accordance with this Article shall be of limited duration, non-discriminatory, transparent and may not go beyond what is necessary to remedy circumstances described in paragraph 2 of Article XI of the GATT 1994 and may not create unnecessary obstacles to trade between the Parties.
Article 2.13. Fees and Formalities
Article VIII of the GATT 1994, shall apply, and is hereby incorporated into and made part of this Agreement, mutatis mutandis,subject to Article 7 (Fees and Formalities) of Annex V Trade Facilitation.
Article 2.14. Internal Taxation and Regulations
Article III of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.15. Trade Facilitation
The provisions regarding Trade Facilitation are set out in Annex V (Trade Facilitation).
Article 2.16. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties relating to subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures, except as provided for in paragraph 2.
2. Before an EFTA State or Ukraine, as the case may be, initiates an investigation to determine the existence, degree and effect of any alleged subsidy in Ukraine or in an EFTA State, as provided for in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures, the Party considering initiating an investigation shall notify in writing the Party whose goods are subject to investigation and allow for a 60 day period with a view to finding a mutually acceptable solution. The consultations shall take place in the Joint Committee if any Party so requests within 30 days from the receipt of the notification.
Article 2.17. Anti-dumping
1. A Party shall not apply anti-dumping measures, as provided for under Article VI of the GATT 1994 and the WTO Agreement on Implementation of Article VI of the GATT 1994 in relation to products originating in another Party.
2. Five years from entry into force of this Agreement, the Parties may in the Joint Committee review the operation of paragraph 1. Thereafter the Parties may conduct biennial reviews of this matter in the Joint Committee.
Article 2.18. Global Safeguard Measures
This Agreement does not confer any additional rights or impose any additional obligations on the Parties with regard to actions taken pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, except that a Party taking a safeguard measure under Article XIX of GATT 1994 and the WTO Agreement on Safeguards shall, to the extent consistent with the obligations under the WTO Agreements, exclude imports of an originating good from another Party if such imports are not a substantial cause of serious injury or threat thereof.
Article 2.19. Bilateral Safeguard Measures
1. Where, as a result of the reduction or elimination of a customs duty under this Agreement, any product originating in a Party is being imported into the territory of another Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to constitute a substantial cause of serious injury or threat thereof to the domestic industry of like or directly competitive products in the territory of the importing Party, the importing Party may take bilateral safeguard measures to the minimum extent necessary to remedy or prevent the injury, subject to the provisions of paragraphs 2 to 10.
2. Bilateral safeguard measures shall only be taken upon clear evidence that increased imports have caused or are threatening to cause serious injury pursuant to an investigation in accordance with the procedures laid down in Articles 3 and 4 of the WTO Agreement on Safeguards.
3. The Party intending to take a bilateral safeguard measure under this Article shall immediately, and in any case before taking a measure, make notification to the other Parties in writing or by electronic communication. The notification shall contain all pertinent information, which shall include evidence of serious injury or threat thereof caused by increased imports, a precise description of the product involved and the proposed measure, as well as the proposed date of introduction, expected duration and timetable for the progressive removal of the measure. A Party that may be affected by the bilateral safeguard measure shall be offered compensation in the form of substantially equivalent trade liberalisation in relation to the imports from any such Party.
4. If the conditions set out in paragraph 1 are met, the importing Party may take measures consisting of:
(a) suspending the further reduction of any rate of customs duty provided for under this Agreement for the product; or
(b) increasing the rate of customs duty for the product to a level not to exceed the lesser of: